How do I determine the best input sensitivity setting?

The input sensitivity setting is a function of amplifier gain. You will want to match it with the output level of whatever is before the amp in the audio chain (i.e. preamps, mixers). For amplifiers with a 0.775V position, this positions corresponds to a 0 dBu level. The 1.4V position corresponds to a +4 dBu level. The 26 dB position is a fixed gain position. The 26 dB position is also the lowest gain position, and will usually work well with output levels of +10 dBu (2.5Vrms and above).